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Vision – Melbourne 2032: Looking back over the last 25 years

Posted in Research, Visions by Ferne Edwards on May 8th, 2007

The following document is written by Chris Ryan and is an outcome of VEIL, the Victorian Eco Innovation Lab, ACSIS, University of Melbourne 2006.

[Edited extract from an internal report of the Victorian Department of Eco-Innovation and Sustainable Living (DEISL) Jan 2032: “Melbourne: the dynamics of change and the impacts of various policy approaches; learning from the revolution of the last 25 years?” by C. Ryan, Senior Policy Analyst, January 2032.]

Sometimes we need to be reminded just how profoundly different Melbourne is in 2032, in its structure, in its economic base and in the nature of daily life, from the City it was at the turn of the century. In retrospect many of the changes to Melbourne can be understood when we consider the impacts of various critical events and the changing nature of community concerns which shaped the way that social, political and technological developments unfolded during and after the decade 2000 – 2010. The period of intense ‘innovation for sustainability, that came to identify the years 2007-2015, seems to have been an inevitable outcome of those events and concerns. Five years after the turn of the century, the scale of the change in patterns of resource use that was necessary for a sustainable existence was finally starting to catch public attention. Government priorities and policy were framed against some significant long term commitments for reductions in per-capita consumption (particularly for water and carbon-based energy).

Much has been written about the impact of carbon pricing and the various trading systems trialled in different regions and markets during this period. These had a major affect on the restructuring of the citys systems, economic and physical. But hindsight shows that there were other dynamics at work that may have been equally as important as drivers for change. Following a well understood pattern in technological and social development, it is clear that the shape of Melbourne over these past 25 years was affected by a ‘disruptive paradigm that was to fundamentally change ideas about the organisation of systems of production and consumption, and the infrastructure needed to support sustainable economic activity.1 Key targets for future resource use were set by the then Victorian government in 2006 and are discussed later within this document.

Many terms have been used to describe that paradigm change – ‘multi-local, ‘networked local, ‘networked decentralisation, ‘glocal – but the term distributed has been the most consistently used: distributed energy, distributed water systems, distributed development, distributed production, distributed economies. The potential for this paradigm change was sufficiently evident in 2006 that a number of future scenario exercises, which were conducted at that time, sketched out visions of Australian identity and economic development that seem prescient when viewed from 2032. (See “innovative Oz” ; “Glocal” and “Urban Colonies” – summarised below.)2

Before elaborating on the nature of the new ‘distributed development paradigm it is worth briefly reviewing a number of other factors that were working to change the direction of Melbournes development.

Security – adaptation and resilience
The pattern of distributed living that is now evident in 2032 appears to have emerged from a dynamic response to growing concern over the implications and impacts of global warming and more broadly consumption and waste. Connected to those concerns one other dominant issue shaped political and social issues: security.

General geopolitical security issues were very important right through the first 25 years of the century. However concern about deliberate attacks on key elements of daily life was greatly compounded by concerns about disruption caused by natural events, particularly from severe weather activity, new global diseases, sea level rise and so on. Modelling the impacts of global warming is complex and although the predictions increased in confidence through the early decades of work, for a long time the only real sense of certainty was that the incidence of extreme climactic events would increase. Every such incident, anywhere in the world, increased the general sense of insecurity. In Australia it is easy to see a pattern of events through the last 25 years that contributed to growing insecurity about the robustness of turn of the century infrastructure and past systems of production and consumption. The persistent and devastating drought in the first decade of the century increased the communitys sense of vulnerability as past investment in water-hungry systems proved to be a barrier to adapting to changed conditions. This problem was evident in so many critical areas of life, from agriculture and food, to parks and home gardens, building systems, bathrooms, kitchens, laundry and sewage. Big engineering solutions such as desalination plants introduced new dependencies and vulnerabilities when supplies were disrupted through technical and other failures.

Large systems created large vulnerabilities. The increasingly serious disruption of essential services, from fires and then from the severe storms of ‘the cyclone years (2009 -2011), derailed economic recovery from the end of the 2002-2008 drought. Disruptions to electricity, fuel, agriculture and food supplies, and even fresh water systems, magnified the direct economic losses from the fires and storms. The debate over nuclear power in Australia (proposed as a viable solution for carbon free-energy in the early part of the century) moved quickly from the usual range of issues to do with the form of power generation (radiation, waste, nuclear weapons proliferation) to issues of vulnerability and security which arose more directly from the scale of nuclear power plants. A system dependent on a relatively small number of relatively large generation units seemed to heighten the concern about deliberate or accidental (climate related) interruption to supply3.

A general sense of distrust of systems of production and consumption was also evident in relation to food. Looking back to the turn of the century it is easy to see this latent concern expressed in the rapid growth of farmers markets4 (particularly in the city) and in the increasing importance of organic and seasonal and ‘slow foods. A mixture of health issues (obesity and diabetes), environmental issues (embodied water, ‘food-miles) and ethical concerns (treatment of ‘factory-farmed animals) brought food and agriculture to the centre of controversy about the sustainability of modern life. The demand for land for bio-mass and alternative fuels in the years 2008 -2015, brought many of these concerns into focus as the need to define agricultural priorities became a major policy concern5.

Local action – security and innovation
Evidence that community concern was being focused on localised action was there in the early century. Over 210 local governments across Australia had signed up to a ‘Cities for Climate Protection program with voluntary targets for CO2 reduction6. By 2008 local government (LG) was also an important focus for new programs in water saving, with a general sense of experimentation and innovation in water systems at a local community / LG level, being almost a hallmark of the decade 2007- 2017.

The extraordinary period of innovation in sustainable buildings (2005 -2015) seems to have been led y LG following the completion of the early ‘icon building of Council House 2 (CH2) in Melbourne, which opened in 2006. The competitive dynamic of the private sector, which saw innovative green buildings become a critical ‘reputation-symbol, appears to have followed innovation paths first tested in LG, public buildings. The UK “Woking borough model”7 inspired many similar projects at LG level in Victoria, initially by the ‘greener inner-city Melbourne city councils, but followed quickly by some of the important regional towns in the Bendigo corridor.

A critical shift in this period was undoubtedly the recognition that both innovation for sustainability and the generation of diverse localised solutions were important for future economic development. Research and new policy approaches in the UK and the Netherlands, (which became influential in international thinking in the period 2005-15) focused on the role of local communities, LGs and cities. These were viewed as important sources of new ‘innovation in socio-technical systems relevant to sustainable development. This perspective was reinforced by initiatives such as the appointment of a ‘City Innovator in Rotterdam in 2005 who quickly focused on ‘innovation for sustainability. City (eco) Innovator positions quickly appeared in major cities around the world, with Melbourne being one of the early adopters. Diverse experimentation with new sustainable systems (energy, water, waste, food, transport, housing) at the local level was actively supported by Victorian State governments, (and later, following the radical redefinition of ‘federal-state relations in the second decade of the century, by Federal governments as well).

Personal action – the economists ‘irrational consumer

In the serious drought period from the turn of the century governments were often caught off-guard by the strength of community concern about water supplies and the willingness of citizens to adopt  new water saving systems. It was soon apparent that there was a level of household expenditure for becoming ‘water smart (installing rainwater tanks, grey water systems etc) which could not be explained simply as a response to subsidies introduced by government, or by calculations of ‘payback (in $ savings from reduced water consumption). The willingness of people to act – and to be seen as acting8 – was not driven solely by economic self-interest but by a desire to ‘do something as a personal contribution to a perceived, collective, problem.

In the UK, over the period 2006-2008, there was much discussion of the expected contribution of microgeneration of electricity (variously projected as 30-50% of total by 2050), from solar PV, wind and
combined heat and power (CHP) systems, originating from a variety of investments at different scales (including community/LG developments such as Woking, mentioned above). An unexpected rise in these sources derived from the installation of roof-top wind and solar PV systems at individual household level (even though these systems were small and generally inefficient9). This was unexpected because pay-back periods were usually very long (in the case of PV, conservatively in excess of 20 years). However the cost of such systems was not far in excess of discretionary household spending (being in the case of wind turbines about the same as a good HD television system) and the motivation for purchase was often found to be a combination of being ‘a good environmental citizen (personal satisfaction) and displaying the fact – being visibly a good environmental citizen. Such expenditure was quickly labelled the ‘environmental iPod effect.

Load Limiting – a way of sharing

In 2010, as governments tried to stimulate investment in efficiency (in water and energy, for example) and limit the peak-loads in resource demand (for example from air-conditioning), several electricity retailers introduced schemes to encourage consumers (residential and commercial) to limit their instantaneous demand. Initially residential customers were offered a tariff reduction if they opted for a maximum electricity demand of 2.5 KW. This proved a popular scheme, particularly when the Italian community pointed out that Italy had operated its electricity system like this for the last 50 years with no apparently detrimental economic effects10. Community attitudes changed quickly and so load limiting is now almost universal. Australians, like Italians of old, have simply learned how to balance the demand of their appliances. Tariff reduction has given way to a tariff surcharge for anyone needing to have unlimited supply.

Load limiting systems for water are not as universal today, but where they exist they stem from a similar motivation to limiting energy use. These too have a counterpart in Italy and some other industrialised economies. The severe water restrictions of the early decades of the century led to real changes in community attitudes to water as a precious resource. Even after the worst of the drought was over many people were found to be in favour of maintaining some levels of restrictions on use, which they saw as both fair and equitable. Now, many communities have household or neighbourhood storage tanks filled under pressure from the ‘mains for a number of hours each week (with local pumps to distribute water to taps, etc). At the rest of the time the system pressure is greatly reduced, but water supply is always available for essential needs. Such systems provide a fixed allocation of water which citizens see as fair. Monitoring levels of water availability (tank levels) has had a significant effect on moderating consumption. Reducing pressure levels in water mains has both reduced energy consumption and significantly reduced piping losses.

The disruptive paradigm of distributed systems
Globally, as the urgent need to shift to carbon-free energy became apparent (to maintain CO2 levels below the 450 ppm), community support focused on energy efficiency programs, the diffusion of cost-effective renewable energy and increasing public R&D spending on advances in solar PV systems.

Growth in renewable energy has primarily involved grid connected systems, using the grid as load sharing to even out the variability of wind and sun by connecting local generation distributed across the country. Production of electricity involved a mix of wind, solar, biomass, CHP, micro-hydro and wave/sea power, situated according to availability of sources and needs. Quickly, the old paradigm, of highly concentrated power generation supplying dispersed users, was replaced with a distributed system of localised, small to medium scale generation, supplying local needs – with the grid now providing for any local shortfall in electricity demand and/or distributing excess to other parts of the system. By 2010-2015 this distributed system was also supporting new businesses in a variety of gridconnected energy storage systems, sited according to opportunity. Energy storage systems have also proved to be a great stimulant for Australian eco-innovation exports over the last 15 years.(see below).

Perhaps this alone would not have generated a sense of paradigm shift were it not for the fact that essentially the same pattern of change started to appear in the water supply and distribution system at the turn of the century. Here too the old paradigm of large scale rainwater collection systems (catchments and dams) distributing water to distant users, was quickly replaced by ‘water sensitive design systems. These were based on retaining storm water wherever it fell for local use, with variation in availability evened out through ‘grid connected supply from local catchments. Freshwater supply was complimented by treatment of waste water at various local scales. This new paradigm was clearly distinguished from more traditional ideas of ‘decentralisation by the emphasis on connectivity to a ‘network which was required for the sharing of excess. This systems approach had already shown itself to be robust and secure as the basis for the development of the internet over the 1990s, with networked production and distribution of information underpinning the strong period of economic growth through the early part of the century. In fact, information and communications technology ICT – and the internet as a system – has proven itself to be the enabling
technology of the sustainability industrial revolution. This is discussed in more detail below. Many new services and business grew around this new pattern of production and consumption as it became the model for development. Systems of food production and distribution, along with transport and urban design, were shaped by the changes that started with energy and water (and ICT/the internet). The result is the society and economy that we know as Melbourne today. The echoes of ‘Innovative Oz, ‘Glocal and ‘Urban Colonies envisioned in 2006 (see attachment below) are clear.

Sustainable technology, information technology and ‘recombinant innovation

In the early years of the century the reality of global warming created much talk of new ‘industrial revolutions and ‘break-through, or ‘leap-frog innovation. Broadly, in government policy and industry investment, this meant a focus on the development of new technologies. Public interest and confidence revolved around the belief that the innovation system would lead to the discovery of many new super efficient technologies – LED lighting systems, fuel cells, CO2 sequestration systems, bio-technologies, nano-technologies, and so on. In retrospect it is clear that the real force of the revolution has been located elsewhere: not so much
in disruptive technologies but disruptive systems – in the (re)organisation of systems of production and consumption. This reorganisation has involved the development of new products and services and businesses, new infrastructure, new lifestyles and new consumption behaviours. Contrary to early expectations, most of this has relied on exploiting what were existing technologies rather than new ones; innovation has resulted from the creative recombination of existing technologies to provide new ways to do old things, as well as new ways to do new things. For a small country this aspect of the sustainability revolution has proved to be been a great boon. We have limited resources to develop important new technologies. The application of existing technologies to new ends requires creativity, ingenuity and vision but can be achieved with much lower capital investment. This has greatly contributed to our ability to develop products, services, production and management systems that are utilised world-wide. The question of how it was that the ‘innovation story of this country in the last 25 years came to focus on ‘innovation for sustainability has been the subject of many scholarly studies and these are discussed in a later section of this review. There is broad agreement that we were essentially forced by circumstances into research and development to address a local crisis that has since grown to become our sustainable-water-systems industry11. The development of fire sensing and control systems probably has a similar origin. However all the other areas of Australias global position in sustainable
systems are harder to explain12. It is the case that CSIRO was at one time (in the last century) a global
leader in solar thermal research and development. However, that work languished for such a long time that it is hard to relate our current global position in solar thermal desalination and heat storage systems (which we share with Israel) to that earlier knowledge base. The same questions apply to the trajectory for our food processing and packaging systems and the range of energy-cladding systems for high-rise buildings, because again there is a broken link with earlier CSIRO and university work13. Of course it is our energy storage systems for which we are best known globally, because they have transformed the viability of distributed renewable energy14. What is clear, running though most of our successful ‘sustainable systems industry, is that we quickly developed and exploited information technology. Australian businesses have built on local research
into sensors, communications systems, data processing and management, to create new sustainable service industries and ‘system solutions. The success of distributed production systems world-wide has derived from just such hardware and software solutions and, even though this is now such a competitive market, Australias leading position remains essentially unchanged. As later sections of the review argue, it is interesting to classify Victorias important sustainable-systems exports according to the underlying ICT contribution, e.g.: feedback systems – sensors, data communications, interface design and so on. We have also been successful in developing important internet systems which facilitate localised solutions15.

Appendix One: Medium term policy directions (2007-2015)
This period was one of escalating focus on environmental issues in the economy, driven by community concern and media attention. It produced a flurry of new policy thinking and action, almost equally divided between policies to deliver structural change in the economy and those to facilitate and support action by individuals and local communities. Action on global warming divided between GHG reduction and adaptation to climate change. A sample of research projects initiated by government gives some flavour of the times.

Research contracts were let to investigate:
(2007) The creation of a Victorian/national research centre for adaptation to climate change.
(2007) Labelling schemes for embedded water, in a range of goods, including food.
(2007) The most effective planning controls to enforce optimum collection, storage and use of rainwater in new developments.
(2007) The most effective planning controls to enforce safe and efficient treatment and reuse of grey-water in new developments.
(2007) Best-practice processes for the evaluation of trajectories of new and emerging technologies and innovation for their contribution to environmental sustainability; and the most effective way of creating a standing capacity in Victoria to advise government and industry on new technologies for eco-innovation.
(2008) Ways to best to ensure that all new government investment in science, technology and innovation supports R&D and new business ventures that led to a ‘significant decoupling of resource use from economic growth and/or provide innovative solutions for adaptation to climate change.
(2008) The scale, potential impact and policy implications of a variety of ‘voluntary social movements motivated by a desire to change patterns of consumption ( e.g. farmers markets; organics; seasonal foods; slow food; community composting; carbon-neutral households and communities; shared housing; culture jamming; skip-dipping; sufficiency pledges).
(2009) How to develop effective policies and subsidies to ensure that new export growth derives from businesses selling sustainable solutions (in areas defined above).
(2009) Effective ways to subsidise the capital costs of installation of small grid-connected solar and wind systems on residential and commercial buildings and to minimise planning barriers to such installations, whilst ensuring public safety.
(2009) Mechanisms to support innovation in sewage systems for cities to dramatically lower water consumption.
(2010) How to formulate policies and implement systems to ensure that electricity generated from any small-scale (under 25kw ) renewable sources, (including CHP) can be sold into the electricity market at ‘marginal-retail rates (retail market rate plus margin for avoided cost of new fossil fuel generation)
(2011) Mechanisms to identify and disseminate commercially viable innovations that arise from a range of voluntary local programs for energy saving and sustainability action (e.g. Cities for Climate Protection or Sustainability Street).
(2011) The most appropriate forms of communication and most appropriate mechanisms for delivering data (feedback systems) on resource consumption at different scales (products, buildings, communities, towns and cities) in order to stimulate behaviour change. (Government smart-meter pilot project in electricity was extended to smart metering of water consumption, in 2007.)
Appendix One: Medium term policy directions (2007-2015)

Appendix Two: 2006: Examples of policy targets for the future (from various government sources)
In 2006 leading into an election, the government of Victorian had set in place the following targets:
Cut GHG emissions by 60% by 2050 compared to 2000 levels
Adopt a target of a 10% reduction in household emissions by 2010
Cut the Governments energy use by a further 5 per cent by 2010 on top of the current 15 per cent improvement – total 20% below 2000 levels by 2010)
Reduce Melbournes water usage by 15 per cent on a per capita basis by 2010
Set a target for industry in Melbourne and regional cities to reduce water use by 10% over the next ten years
Increase waste water reuse in Melbourne to 20% by 2010
Renewable energy:
Increase the share of Victorias electricity consumption from renewable energy sources from the current 4 per cent to 10 per cent by the year 2010
20% renewable and low-carbon emissions energy by 2020
5 per cent Biofuels target (about 400 million litres of either ethanol or biodiesel) in Victoria by 2010
Increase the Governments use of Green Power to 25% by 2010
A 1.5 million tonne reduction in the projected quantity of solid waste generated, by 2014
75% by weight of solid waste recovered for reuse, recylcing and or energy generation in 2014. 80% for Construction and demolition waste, 80% for Commercial and Industrial waste and 65% for Municipal waste (interim targets at 65%, 65% and 45% by 2008-09)
Be well advance along the pathway of becoming a low waste society by 2014
$30 billion in exports and to double the number of Victorian exporters by 2010
Food and fibre export target of $12 billion by 2010

Appendix Three: Examples of future visions from 2006

Concern and uncertainty about the future in 2006 led to some intensive activity to envisage a desirable future, in Australia and (for similar reasons) in the UK. The following three summaries of such work appear in retrospect to be particularly relevant to the way the future for Australia was to unfold. They are summarised and slightly modified for this document. The first two are reproduced from a two day process run by the Melbourne University Business School in September 2006. They represent two aspects of preferred Visions of Australian Identity from this process. They were presented to the Australian Davos Forum in 2006:
Innovative Oz:

“A resurgence of Australia as a creative knowledge producer, a design and innovation export economy. The self-image of the boxing kangaroo, having the capacity to meet any adversity. Adversity that brings out the best in Australians – they network, they invent, they innovate, they create a new future, to overcome adversity. Global connection, early technology adoption and social experimentation were all attributes of this future. Gender equity, embracing the ways of knowing of other cultures are all attributes that help Australia stay innovative. Culture enhances science and technology, creating a unique country and people. Identity is both tough – the nerves of steel as exhibited by female and male sports heroes – and soft, open to others, desiring to learn from all so as to be best one can be”.


“An alternative future, that of the “enlightened Australian” living in a more secure Global – Local world. National identity is softer, commitment to sustainability, the environment and (bio)regional locale stronger. The nation-state and states themselves are less important than multi-local networks as a confederalism of national interests. Identity is Gaian, linked to the planet as whole and ones own locale. The “cultural creatives” demographic group is the driver for this future. Sustainability, spiritual values, global-local governance are key values in this future. Indigenous culture and spirituality are not external to identity but embraced at deep levels. Innovation emerges not just from science and technology but from ethics and integrity, from a diversity of decentralised models of production and consumption”.

The next came from the UK department of Trade and Industry from a foresight process in 2006. This vision was developed to plan for technological development:
Urban Colonies:

“Investment in technology primarily focuses on minimising environmental impacts. Good environmental practice is at the heart of economic and social policies; sustainable buildings, distributed power generation and new urban planning policies have created compact, sustainable cities. Transport is permitted only if green and clean – car use is still energy expensive and is restricted. Public transport – electric and low-energy – is efficient and widely used. Competitive cities have the IT infrastructure needed to link high-value knowledge businesses, with IT supporting transport systems and networked virtual communities. Rural areas have become more decentralised, effectively acting as food and bio-fuel sources for cities. Consumption of energy, water, materials has fallen. New environmentally driven service systems have increased systems of leasing, renting, sharing of goods and the service sector is now an even stronger part of the economy. Resource use is now a fundamental part of the tax system and disposable items are less popular. Improved urban design, organised to minimise the need for travel, is a response.

1. It was already becoming clear that the future could not be, in any meaningful sense, a continuation of the past.
2 In 2003, a European partnership of regional development programs
created a collaborative laboratory for sustainable development, based
on networked local production and consumption, taking the term
‘distributed economies from a research program in a Swedish research
Institute. [See:]
3 Of course the other issues of breach of containment and radiation effects were always a part of the total set of concerns.
4 Where the distrust was probably focused on the intermediaries in the
food industry – processors, wholesalers, supermarkets, etc.
5 The series of diseases that devastated many agricultural crops
(apparently the result of global warming) had a significant economic
impact on the country, but none of them directly affected the quality
or safety of food.
6 Significantly in advance of action taken at other levels of government and by business.
7 An early and highly publicised example of a decision by a community and its council to go carbon-neutral through investment in diverse local renewable energy systems with a ‘private grid.
8 The visibility of tanks and the installation of household signs identifying the use of recycled water and so on.
9 Particularly in urban areas where wind and sunlight were likely to be adversely affected by neighbouring buildings.
10 This was the case even without the advantages of ‘smart meters; anyone attempting to draw more than the allowed KW load had their electricity switched off at their meter and had to push a button to reconnect it.
11 Throughout these Australian Innovation stories there is a clever brand message that links our systems innovation to our global image of survival in a harsh and unforgiving environment and our clean-green tourist icons. This does seem to have helped our global marketing of local technologies, services and systems, but it is debatable whether this in any sense acted as a stimulant or driver for what developed.
12 Particularly given the open hostility and scepticism to major environmental issues such as climate change that was the federal government stance at the turn of the century.
13 At the end of the first decade of this century it was widely assumed we had lost our position of international leadership in efficient solar PV development.
14 Again, the innovation story of the vanadium redox battery is generally cast as a response to the need to find solutions for storage on remote islands, which ignores much of the real history. See:
15 This appeared initially with the development of profitable new ‘inter-personal internet-based services in the early stages of the century. Developments such as these demonstrated to the market that the dynamic of ICT was not overwhelmingly the ‘eradication of place or ‘despacialisation as had been predicted by the ICT visionaries of the1990s [Negraponte 1995, Brown and Duguid 2000]. Economically strong local systems of production were demonstrably able to be rooted in spatially localised conditions, supported by ICT and the internet.

© Chris Ryan Victorian Eco Innovation Lab, ACSIS, University of Melbourne 2006

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